PhillyDeals: Schweiker calls new job at Renmatix 'once in a lifetime'

An Atlantic City slot machine. Moody's has downgraded some casino authority bonds.
An Atlantic City slot machine. Moody's has downgraded some casino authority bonds. (CURT HUDSON / Associated Press)
Posted: February 09, 2012

Former Pennsylvania Gov. Mark Schweiker has left his post as president of PRWT Business Process Solutions to join Renmatix, a King of Prussia company that says it has a high-pressure process to turn wood and farm waste into a source of fuel and chemicals under the brand name Plantro.

"The offer amounted to a once-in-a-lifetime opportunity," Schweiker told me. He called the biochemicals business "an opportunity to make industrial history and lower our dependence on foreign oil."

Renmatix moved its headquarters from Georgia to Philadelphia last year, after former Rohm & Haas executive Michael Hamilton was appointed its chief executive. Its headquarters, on Allendale Road near the King of Prussia shopping centers, employs 20. Work has begun on an adjoining lab; the complex will eventually house 150.

Schweiker's job will include scouting possible plant sites in Pennsylvania and other states, as well as lobbying governments for help. He said that Gov. Corbett, a Republican like Schweiker, had invited the firm north and that the company and state had been negotiating "a combination of tax credits and grant funding, mostly tax credits," to sweeten the move.

Schweiker said he and Hamilton were recruited to Renmatix by partners of the Silicon Valley investment firm Kleiner, Perkins, Caufield & Byers. Renmatix investors, including Kleiner partner John Doerr, have committed $50 million to the company, $30 million from the German chemical giant BASF. Wilmington-based DuPont Co. spent $6 billion last year for Denmark-based Danisco, which is developing a rival, enzymes-based biofuels process.

Schweiker's previous employer, PRWT, is, with

its affiliates, a nearly $100 million-a-year (in sales) business that manages the Philadelphia Parking Authority impoundment lot, New Jersey E-ZPass, and other government services.

PRWT was also, on Schweiker's watch, the operator of a former Merck & Co. Inc. antibiotics factory in Riverside, Pa. That complex included a biological-materials production facility that was picked by California-based Solazyme as the site for a federally subsidized biofuels project in 2009. Solazyme and Department of Energy officials didn't return calls on the status of that project. Schweiker wouldn't comment on whether that plant was a possible Renmatix site.

Shutdown

In the first Pennsylvania insurance-company failure since 2004, the state Insurance Department has won Commonwealth Court approval to take over

First Sealord Surety Inc., a Villanova-based company that sold bonds that regional construction contractors used to guarantee they would finish their work on government and private construction projects.

State insurance officials have taken control of the firm. Clients have 30 days to find new coverage.

Unlike other property and casualty insurance, surety bonds aren't insured against company failure by industry or public funds, said department spokeswoman Rosanne Placey. The firm had 830 customers, with bonds averaging $400,000, of which about 125 were currently in litigation, she said. First Sealord, founded in the early 1990s, employs about 20, down from a peak of 50.

Insurance Commissioner Michael F. Consedine and deputy Stephen Johnson petitioned Commonwealth Court last weekend for the liquidation order, after winning agreement from First Sealord board members Edmond Villani, Markus Rohrbasser, Nicholas Bratt, Ken Brier, Ted Drauschak, and Joel Cooperman.

A.M. Best downgraded First Sealord's ratings after a planned sale of the company fell through.

Small surety insurers have suffered in the construction slump.

Ante up

"Rapidly declining" Atlantic City casino parking fees have provoked Moody's Investors Service to cut its credit rating for $253 million in taxable New Jersey Casino Reinvestment Development Authority bonds (2005 series A and B), to Baa1 ("moderate credit risk . . . medium grade") from A1 ("upper medium grade . . . low credit risk"). The outlook is "negative," which means more cuts may be in the works. Moody's also levied a similar downgrade, from A3 to Baa1, on $75 million in Hotel Room Fee Revenue Bonds (2004) backed by the $3-a-room hotel tax.

In a statement, Moody's analyst Josellyn Yousef blamed Atlantic City casinos' "deteriorating economic base evidenced by rapidly declining gross casino revenues. . . . We believe competitive pressure to the Atlantic City gaming industry is likely not to let up in the medium term."

The drop in Shore gamblers is no secret, but Moody's "surprise" negative outlook is unjustified, John Palmieri, the authority's executive director, told me. "We're planning to spend $150 million over the next five years to bring in tourists," he said, as well as millions more from private promotions.


Contact columnist Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com,

or @PhillyJoeD on Twitter.

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